Yves has a post which explains how the mortgage problem is being drawn out. It looks like people are getting 3 years of relief payments in restructuring, but then in 3 years they have the same problem, a mortgage reset to what they can't afford. [more]
Interesting graph over on Calculated Risk showing today's crash in contrast to the dot com crash and the 1973 oil crisis and the 1987 crash. Quite dramatic really...
Early, as in this Feb 2007 post, I was saying that I didn't think buybacks were good for investors. They create an artifical demand for the stock that stops once the buy back program is finished, and they tend to strongly enable executives to do what is best for executives rather then shareholders as they artificially inflate the share price with the buyback program and win the "You can't prove I'm a corporate fraudster" lottery as the cash out their options, essentially replacing many of the so called bought back shares. [more]
On my last post someone said the statement "we live in interesting times" is a Chinese saying associated with bad things. [more]
Bespoken has a post...
18 stocks up on the year...
187 stocks down more then 50%...
The 20 worst performing stocks are down 78% or more...
In the banking industry the answer is yes. Banking got really stupid and it is as if they started competing to see who could jump off the highest cliff. [more]
I have not understood at all how the US dollar has gotten so strong when everything they've done in fact means you should be dumping the currency, but with so many places doing the same things, then stay the course relative to each other. [more]
``The world has been slow to realize that we are living this year in the shadow of one of the greatest economic catastrophes of modern history. But now that the man in the street has become aware of what is happening, he, not knowing the why and wherefore, is as full today of what may prove excessive fears as, previously, when the trouble was first coming on, he was lacking in what would have been a reasonable anxiety. He beings to doubt the future. Is he now awakening from a pleasant dream to face the darkness of facts? Or dropping off into a nightmare which will pass away?'' [more]
I have taken critism for going 100% underperform, which was completely the correct move when your belief system is the market was seriously bubbled. [more]
I've been saying for a year that I doubt very much that people will be getting the pension they think they are getting, and here's a pension hit that never crossed my mind. [more]
Big Picture has a post which has a section that needs to be quoted.... [more]
Predictions... Will the market close early today or any day before the end of the month?
I've got to say, this market is causing some major stress, even from the sidelines...
Mish has a post looking at Japan and their market after their incredible housing bubble in the late 80s, early 90s. [more]
Surfing around I notice quite a few mines closing. I wonder how many have been operating in the hole burning through their cash reserves. [more]
Naked Capitalism mentions an oil stat that I think is extremely significant, along with some other significant facts. [more]
Well, it seems that loss of dividend spending is here. Hard to spend dividends that get cut. [more]
Goodwill is airy-fairy accounting. It should be illegal. [more]
That is the title of a blog I found on Financial Armageddon. I had a look at the site and the author did an awesome job putting it together. The graphs tell the story. [more]
Bloomberg has a story on Freeport's profits, which are down by 33%. [more]
I just heard that the Canadian Linens and Things is also going out of business. Apparently the unprofitable American wing is pulling them down. They have been profitable. [more]
I found a pretty good post on zinc. The author references the price at 70c/lb, but it is currently 53-54c/lb. [more]
... the executives forced to sell shares to meet margin calls?
I am so disgusted with what I have found in financial report after financial report...
The title is of an article that I found interesting. The author talks about the regrets of not taking action to all the bear messages. [more]
As far as the Canadian housing bubble goes, British Columbia has it the worst. You have more then half the population, perhaps 75%, living in areas where the homes were the least affordable. Indeed, for about 8 years ago now struggling families started moving to try and manage expenses better. So the suburb Coquitlam, which saw the education system grow by a 1000 students per year in the 1990s saw the student population declining by 500-1000 per year and the number one reason on the exit surveys done was affordability. [more]
Market ticker has a worth reading post featuring Anna Schwartz, an economist that actually lived through the depression. [more]
Financial Armageddon has a post about the problems in Britain. Something that caught my attention in it is the number of foreign workers leaving. [more]
Yves has a post showing the degree that government is following the same path as during the depression. [more]
I have been on the deflation side of the debate and there are things that concern me towards inflation, I am still in the deflation camp. [more]
Lets see, $2.25 trillion for financial crisis bailout... [more]
Since seeing the news that Iceland was on the verge of a currency collapse I have been following their news. I saw earlier in the week their market reopened at 23c on the dollar from the previous close. Iceland has those derivative things, the CDOs, which have been a source of enormous uncertainty in the markets. Yves explains this stuff fairly well. It doesn't give a dollar value for the Iceland problem... [more]
Yves has a post...
Well, these shipping companies are heading out of business when they end up having revenue down 86% and most likely with over supply a further reduction from more unbooked days....
I couldn't help but notice that BHP was down 17% yesterday to about $35. I first wrote about BHP in February 07 when they announced a $10 billion dollar share buyback. They were at $44 and BHP did a stellar accent to almost $96 so I was looking like I was wrong for quite some time. [more]
I always read what the bears had to say, even when I was highly bullish. I first read Frank Veneroso's stuff almost two years ago, The Nuclear Winter in Base Metals. At the time it did not seem realistic, but it cautioned me to keep my eyes open. I met Mr Veneroso at an investment conference in January of 2007 and I was priviledge to listen to his views on different markets and to assess the data that he was presenting. [more]
I am looking back at some of my previous posts and I thought I would link a few... [more]
Leverage has been featured in my posts more then once. I put days upon days into writing "Six Degrees of Leverage." [more]
I figured interest rates would go up in this mess, and they are, but this just isn't anything like how I expected to see it unfold... I figured rates would have to go up as people realised there was enormous risk in the markets and interest rates are supposed to compensate for risk. This doesn't look like that mechanism is happening... But rather now that central banks are lending with complete guarantees, what's the point of having anything in the free market? [more]
and you can interpret that any way you like... [more]
Resource insight has an interesting post that refers to "just in time" systems, with this to say: [more]
The US dollar has gotten extremely bullish and everything else is being dumped, including Canadian and Australian currencies. [more]
Big Picture has a post about some the private documents of AIG from 2007. [more]
I am getting majorly concerned about what these bailouts mean in the bigger picture. [more]
I am reading
"Dow's Worst Week Comes to an End"
"Mr. Baer, who was a Treasury-futures trader on the floor of the Chicago Board of Trade in 1987, said, "I've never seen a credit market like this one. The fear has gotten way ahead of the fundamentals," including an unprecedented round of coordinated central-bank rate cuts this week that would normally prompt banks to increase their lending to one another." [more]
I found a gem of an opinion from 2005, Neil Barsay... [more]
I was reading a Big Picture post about how the banks are unwilling to loan to each other because they don't know who will be standing tomorrow kind of thing. [more]
Wow, I was just looking at Yves blog on Lehman. The one kind of derivative, the credit default swaps (CDS), are horrendous. They were expected to pay out in the 80 to 85% range, which means you pay 4 to 5 times what the mortgage is currently trading for. [more]
Canada has an election next week and with today's news there is nothing that can sway me to give this current government my vote. [more]
... time to retrain to a new occupation permanently. In my Scotland's Bank post last week I pointed out some key differences in housing in Britain compared to here, the fact that they share housing, one person per bedroom in a home. [more]
I just ran into a very well written post on deflation by Robert Prechter over at Safehaven. [more]
NEW STOCK MARKET TERMS
Remember that rouge trader who lost $7 billion and liquidating the positions sent the market into a tail spin?
Big Picture has a post about $400 billion of Lehman CDSs unwinding by tomorrow...
I have nothing in the markets so why do I have a knot in my stomach?
Market Ticker is a blog on my read list. Sometime I have true appreciate for the use of language, and I picked up the title here from a line in his post today. [more]
I do not believe the pain of the financial industry is yet over. There is too much over extended debt that is still out there that has been marginal and as things get tighter, will default. The Alt-A mortgages and the commercial real estate and two big problems that have yet to hit the financial markets and these will take another 2 years to work their way through the markets. [more]
Bespoken has a post which tallies the decline in the world equity markets since last October, $26 trillion dollars which is 41% of the world equity markets. [more]
I am of the belief paying down debt first is your best investment, however, here in Canada we have $121 billion of taxpayer money invested in this market. I feel sick about it and truly wonder how the fund is doing. [more]
CR has a post that 12 million households are in negative equity on their homes, estimates the numbers will increase to 20 million. [more]
I've been saying for a quite a while that people will not be getting the pensions they think they are getting. My assessment of this mess was that pension funds would be very hard hit. Well, so far they've lost 2 trillion dollars. [more]
I lost a lot of hard earned cash the last crash. It was cash earned through wages, and none was earned through the markets. I look at the market and say you make 10k and then lose 3, well, you've still done well. How much skin did you have in earning that 10k in the market compared to going to a job, deciding not to spend and invest instead? That's the money I lost the in the dot.com bubble, wages. [more]
I just ran into a little gem of a search site. pippen.com [more]
Ok, $700 billion bailout and look at this Bank of America announcement. They only earn 15c per share yet they are paying a dividend of 32c per share. They have the nerve to imply that some how reducing the dividend is adding capital. [more]
I just got on to peek at lunch and the first news I see is that Iceland's currency is on the verge of collapse...
Anyone that thinks low interest rates are good for the economy isn't looking at all the effects. The only ones benefiting are those able to refinance at lower rates. For the rest of the economy they are creating unsustainable assumptions, causing investors to take unreasonable risks looking for better returns, and creating debt slaves for the unestablished. [more]
Yves has a piece about the slow down in consumer spending. I didn't realise that the US economy is 2/3rds consumer spending. Then next release on consumer spending is expected to show a 3% decline? That is huge. 2/3rds of 3 is a 2% contraction in the overall economy... In a single quarter? [more]
It looks like some serious trouble for the Euro. The problem with many countries behind it is they aren't all willing to work together with trouble. Naked capitalism is a must read on this topic.
When I look at what's been happening, maybe it is good that I didn't take that many economic courses because some of the stuff I read I can't fathom how people come to those conclusions, except of course through what they are taught in business and economic courses. [more]
Big picture has a post about back room meetings happening back in April, 2004. Do you think these guys told you any lies since then? [more]
This would have been an interesting call to listen in on. Big Picture has posted some live blogging of it. [more]
When I was at an investment conference in Jan of 07 I ran into a friend who was all the rave about hedge funds. What I'd briefly seen of them, well, I just wouldn't touch them. Later I saw estimates that about 10% of the hedge funds would completely implode, or about 500. [more]
Steve Moyer has a post on Safehaven that takes quotes goes back a few years warning about what was happening. [more]
I missed seeing it, but thanks to those who took the time to congratulate me.